I'm only half Welsh, so only half touchy.Welsh people tend to be quite touchy, I find.
If some Welsh people were in legal, loving, sexual relationships with sheep, it would be discriminatory to be rude about them. But it's not, and they're not.
Being anti Welsh/Scottish/English can cause offense, and no doubt people can be guilty of that, but as with the example of Plymouth calling Brighton fans northern, it's clearly harmless banter in this case (I don't care if nobody sings it, but I defend their right to).